LLQP Accident & Sickness flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Utmost good faith

A doctrine requiring both insurer and insured to deal honestly and disclose all material facts; breach by the insured can allow the insurer to void the contract.

Insurable interest

A financial or family relationship that gives a person a legitimate reason to insure another's life or health; it must exist when the contract is formed.

Indemnity principle

The rule that insurance should restore the insured to their pre-loss financial position, not enrich them; it underlies benefit limits and coordination of benefits.

Material misrepresentation

A false statement or omission of a fact that would influence an insurer's decision to issue coverage or set premium; it may allow rescission or claim denial.

Elimination period

The waiting time, measured in days from the start of a disability, before disability income benefits become payable; longer periods reduce premium.

Own-occupation definition

A disability test that pays benefits when the insured cannot perform the material duties of their own occupation, regardless of ability to work elsewhere.

Residual disability benefit

A partial benefit paying a proportionate share of the monthly amount when the insured returns to work but earns less because of the disability.

Guaranteed renewable

A policy the insurer must renew while premiums are paid, but premiums may be increased for an entire class of policyholders, not for one individual.

Group master contract

The agreement between the insurer and the plan sponsor; individual members receive certificates summarizing their coverage rather than the full policy.

Coordination of benefits

A claims rule preventing duplicate payment when two plans cover the same person; the primary plan pays first and the secondary pays the remaining balance.

Birthday rule

A coordination rule for dependent children: the plan of the parent whose birthday falls earlier in the calendar year pays first as primary.

Conversion privilege

The right of a departing group member to convert group coverage into an individual policy without evidence of insurability, usually within 31 days.

Probationary period

The initial waiting period after hire during which a new employee is not yet eligible to enrol in the group benefit plan.

Any-occupation definition

A stricter disability test that pays only when the insured cannot perform the duties of any occupation for which they are reasonably suited by training or experience.

Recurrent disability clause

A provision treating a relapse from the same cause within a stated period, often six months, as a continuation of the prior claim without a new elimination period.

Waiver of premium

A rider that keeps coverage in force without premium payment while the insured remains disabled, typically beginning after the elimination period.

Non-cancellable policy

A disability policy in which the insurer cannot cancel coverage, raise premiums, or change terms as long as premiums are paid.

Cost-of-living adjustment

A rider that periodically increases disability benefits to offset inflation, protecting long-term claimants; it adds to the premium.

Survival period

The number of days, commonly 30, that an insured must remain alive after diagnosis of a critical illness before the lump-sum benefit is payable.

Critical illness lump sum

A tax-free payment made directly to the insured on first diagnosis of a covered condition, usable for any purpose such as treatment or income replacement.

Early diagnosis benefit

A partial payment, often 25 percent of the face amount, for less severe conditions such as early-stage cancer; it reduces the remaining coverage.

Return of premium option

A critical illness feature refunding premiums paid if no claim is made and the policy is surrendered or the insured dies; it raises the premium.

Activities of daily living

Basic self-care tasks such as bathing, dressing, eating, toileting, transferring, and continence; inability to perform several triggers long-term care benefits.

Cognitive impairment trigger

A long-term care benefit trigger based on a diagnosed deterioration in memory or reasoning that requires substantial supervision, independent of physical ADL limits.

Indemnity long-term care benefit

A fixed daily or monthly amount paid regardless of actual expenses incurred, as distinct from reimbursement of documented care costs up to a limit.

Incontestability clause

A provision preventing the insurer from denying a claim for misrepresentation after the policy has been in force for a set period, commonly two years.

Entire contract provision

A clause stating that the policy plus the attached application and riders form the complete agreement, so no outside document can alter it.

Grace period

The period, commonly 30 or 31 days after a premium due date, during which coverage continues; unpaid premium is deducted from any claim paid.

Reinstatement provision

A clause allowing a lapsed policy to be revived on payment of overdue premium and evidence of insurability, often restarting the contestability period.

Pre-existing condition clause

A provision excluding or limiting coverage for conditions that showed symptoms or received treatment during a defined look-back period before the policy began.

Substandard risk

An applicant whose health, occupation, or habits create higher-than-average risk; the insurer may issue coverage with a rated premium or an exclusion.

Free-look period

A consumer protection right allowing the policyholder to cancel a newly issued policy within a set number of days, often 10, for a full premium refund.